Funds management adds to CBA profits
Commonwealth Bank has again declared record dividends and posted strong full year results across all businesses, including funds management which saw a 28 per cent increase in net profit after tax on the back of just 12 per cent growth in funds under administration during the year.
In dollar terms, funds under management in the bank’s funds management operations grew to $123.1 billion while contributions to profit increased to $351 million from $274 million in the previous financial year.
Chief executive David Murray said profit growth in the Colonial First State dominated funds management businesses had been supported by productivity improvements.
The company reported the ratio of funds management expense to average funds under administration had fallen from 0.76 per cent at June 2004, to 0.70 per cent at the end of the 2005 financial year - an improvement of 7.9 per cent.
Murray also attributed the result to strong fund inflows, revenue growth, attractive customer offerings and flat expenses.
The company’s insurance business also contributed more this year, with profits expanding by 21 per cent from the previous reporting year to $156 million. Productivity in the business also improved by 1.7 per cent.
Overall, the bank reported a 55 per cent increase in after-tax profits from the previous year to $3,991 million, or a 31 per cent increase to $3,538 million if value uplift and goodwill amortisation were excluded, as they will be starting from next year when new accounting standards are introduced.
AUTHOR
Zoe Fielding
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